Search in:

Murray inquiry inundated with credit card surcharge complaints

Shaun Drummond

The Murray inquiry has been flooded with complaints on the credit card surcharges levied by merchants. Photo: Getty Images/Pat Scala

Gold Coast businessman Klaus Bartosch is responsible for more than three quarters of the 6,300 second round submissions to the financial system inquiry.

The inquiry has received 5,000 submissions on one topic - credit card surcharging.

The managing director of 1stAvailable, an online healthcare booking service, and former head of sales and marketing at Hostworks, has mounted a one-man campaign to ban businesses surcharging their customers for the fees businesses pay their bank for accepting credit cards.

In "a moment of frustration" in a hotel room while travelling in March 2013, he posted a petition on Change.org calling for Jetstar to drop its "deceitful rip-off $8.50 credit card surcharge for booking online".

Advertisement

Credit card interchange fees paid by merchants typically range up to a maximum of about 2.2 per cent per transaction.

Mr Bartosch said signatories numbers had climbed to 45,000 until two weeks ago, but since then the number had more than doubled to 107,309.

As well as raising his concerns at Murray inquiry public consultations in Sydney and Brisbane, he sent a message explaining his arguments against surcharging to each of his signatories and asked them to put in a submission to the inquiry.

"I got hundreds of replies, some sent me their submissions and some just said they would," he said. "I was able to encourage as many as I could to make a submission to the inquiry.

"I am just a businessman that got pissed off, now I find myself embroiled in a very interesting campaign.

"It shows how incredibly unhappy consumers are about the appearance of these surcharges."

Although his and all other businesses pay for the cost of issuing credit cards to consumers via their bank, Mr Bartosch said it is a cost of doing business, just as handling cash is.

"There are many other costs of doing business. This is just one of them. It has always been in the price of the products and services they charge for. So I can't understand why this should be different."

In June the ACCC took Jetstar and Virgin Australia to the federal court alleging misleading and deceptive conduct for "drip pricing" their high transaction fees at the very end of an online booking.

Mr Bartosch said the Reserve Bank had "let the genie out of the box and set up the opportunity for [businesses] to rip people off" since it said Visa and MasterCard could no longer ban surcharging as they did before 2002.

While surcharges used to be prominent in just a few industries like airlines and taxis, Mr Bartosche said he reckoned more and more businesses were now levying surcharges.

He said some small businesses had contacted him worried about his campaign because half their profit comes from surcharges.

Building products business CSR said interchange fees it is charged have risen rapidly in the past couple of years due to more and more customers using premium credit cards.

The fees for these such cards are charged to the business accepting them.

CSR wants to pass on the true cost of each transaction, but said its bank refused to tell it the cost of each card type.

MasterCard has been in contact with Mr Bartosch and has spoken to numerous other business and consumer groups arguing against surcharging.

It and Visa are calling for the Murray inquiry to recommend a regulator is tasked with forcing business to only surcharge the true cost of a payment.